Bezos’s 2017 Shareholder Letter: High Standards Can Be Taught

2017 Shareholder Letter The high-quality six-page reports Bezos favors appear in this year’s shareholder letter. Inside Amazon, people do not favor PowerPoint. Instead, they are expected to write thoughtfully developed reports with consistent, coherent reasoning. The letter also repeats the emphasis on starting with customers, who are never satisfied. Today’s “wow” soon becomes tomorrow’s routine, forcing you to keep improving. So focus on customers rather than competitors. The largest part of this letter addresses “high standards.” Take a look at how Bezos thinks about them. #BezosShareholderLetter2017 It’s All About The Long Term. To our shareholders: The American Customer Satisfaction Index recently released its annual report, and Amazon took first place for the eighth consecutive year. The U.K. has a similar index, which we have topped for five consecutive years. Amazon also ranked first on LinkedIn’s 2018 Top Companies list, a survey of the companies most sought after by job seekers. Just a few weeks ago, Harris Poll released its annual Reputation Quotient, surveying 25,000 people on topics ranging from the workplace and social responsibility to products and services. Amazon ranked first there for the third consecutive year too. Warm congratulations and thanks to our 560,000 Amazon employees for their tireless, conscientious, customer-focused work every day. On their behalf, I also thank all our customers. Your responses to these surveys are tremendously encouraging. One thing I love about customers is that they are never satisfied. Their expectations do not stand still—they keep rising. That is human nature. We would not have progressed from our primitive beginnings if we were easily satisfied. People hunger for a better life, and yesterday’s “wow” quickly becomes today’s routine. This cycle is moving faster than ever. Perhaps that is because customers now have easier access to more information: in a few seconds and a few taps, they can read reviews, compare prices across platforms, check availability, see how soon something will arrive or whether they can pick it up, and much more. These are examples from Amazon’s retail business, but the same technological empowerment of customers is becoming increasingly common across our other businesses and entire industries. You cannot live off past achievements. Customers will not accept it. How do you stay ahead of rising customer expectations? There is no single way; it takes a combination of things. But high standards across every aspect are certainly important. Over the years, we have had some success in meeting customers’ high expectations. We have also suffered failures costing billions of dollars. Drawing on those experiences, I want to share what I have learned about high standards within organizations. /Innate or Learnable?/ First, a basic question: are high standards innate, or can they be learned? If you take me to a baseball field, you can teach me many things, but you cannot teach me to grow taller. Do we need to recruit people who already have “high standards”? If so, this would simply be a matter of selecting talent. I do not think that is the case. I believe high standards can be taught. In fact, people learn them quite well just by being exposed to them. High standards are contagious: put someone on a team with high standards, and they will soon adapt. The reverse is true too. When low standards prevail, they spread just as quickly. Although exposure itself can teach employees high standards, I believe learning a few core concepts can speed up the process. That is what I want to share in this letter. /Universal or Domain-Specific?/ Another important question is whether high standards are universal or specific to a domain. In other words, if you have high standards in one area, does that mean you have equally high standards elsewhere? I believe they are domain-specific. You must learn high standards anew in each area. When I founded Amazon, I had high standards for innovation, customer care, and hiring. But I did not have them for operations—for example, solving problems, eliminating errors at their roots, and examining processes. I had to learn from my colleagues how to achieve high standards in those areas. Understanding this matters because it keeps you humble. You may think of yourself as demanding in general, but there will always be gaps. There may be “blind dimensions” in which you do not even realize your standards are low or nonexistent. Staying alert to that possibility is essential. /Recognition and Scope/ How do you achieve high standards in a particular domain? First, you must recognize good work and bad work. Second, you need realistic expectations about how difficult achieving a good result will be—the scope of the effort involved. Let me give you two examples. /The Perfect Handstand/ A friend recently decided to learn a perfect unsupported handstand—not against a wall, and not for just a few seconds, but the kind you see on Instagram. She began by joining a handstand group at a yoga studio. She practiced for a while without reaching the standard she wanted, so she hired a handstand coach. Yes, I know what you are wondering: that profession really exists. In the first lesson, the coach gave her excellent advice: “Most people think that if they work hard, they can master a handstand in two weeks. In reality, you need six months of daily practice. If you think you can do it in two weeks, you should leave.” Unrealistic beliefs about the process kill high standards, yet they often go undiscussed. If you or your team want to achieve high standards, you should take the coach’s approach and be realistic about how difficult the process will be. /Six-Page Narratives/ We do not use PowerPoint or any other slide-based presentation. Instead, we write six-page reports with a narrative structure. We read them silently at the start of each meeting. Unsurprisingly, some are beautifully written, like hearing angels sing. They are excellent, thoughtful, and capable of prompting valuable discussion. Others sit at the opposite end of the spectrum. With handstands, recognizing a high standard is easy: you either achieve it or you do not. Writing is different. The difference between an excellent report and an average one is hard to explain. It is almost impossible to write down the criteria for an excellent report. Yet I find that people react similarly to a good one. They recognize it when they see it. That is the standard. Even if you cannot describe it, it exists. Here is what we have found: when a report is not good enough, the problem is often not that its author cannot recognize high standards, but that they have underestimated the difficulty of getting there. They think a high-quality six-page report can be finished in two days, or even a few hours, when it actually requires a week or more. They are trying to perfect a handstand in two weeks, and we have not coached them well enough. Good reports are written and rewritten, shared with colleagues for improvement, set aside for a few days, then revised again with a clear head. That cannot be done in a day or two! A simple approach is to help people understand the difficulty of the journey: a good report is not written in two days. /Skill/ After recognizing high standards and forming realistic expectations about the journey, what about skill? To write a world-class report, must you be a highly experienced writer? Is that another prerequisite? I do not think so, at least not for every individual on a team. A football coach does not need to throw the ball, and a director does not need to act. But each must recognize high standards in their field and have realistic expectations about how difficult they are to achieve. Even writing a six-page report is a team activity. Someone needs the skill, but it does not necessarily have to be you. (Amazon reports do not carry individual authors’ names, only the team’s name.) /The Benefits of High Standards/ Building a culture of high standards is worth the effort and brings many benefits. The natural and obvious one is that you build better products and services for customers. That alone is enough. Some benefits may be less obvious: people are attracted to high standards, which helps recruit and retain employees. More subtly, a culture of high standards protects a company’s most important “invisible” work. This work often receives no attention, but in such a culture, doing it well is its own reward. It is part of being a professional. Finally, high standards are fun! Once you have experienced them, there is no going back. We have now identified four elements of high standards: they can be learned; they are domain-specific; you must recognize them; and you must realistically understand how difficult the journey will be. We apply this across everything we do. We hope it helps you too. “Insist on high standards. Leaders must maintain high standards—even if many people consider those standards unreasonably demanding.” —Excerpt from Amazon’s Leadership Principles /Recent Milestones/ (Chinese translator’s note: This section is too long, so it is omitted rather than translated here. It mainly discusses how much Amazon’s various businesses grew. The initiatives mentioned are Prime, AWS, Marketplace, Alexa, Amazon devices, Prime Video, Amazon Music, Fashion, Whole Foods, Amazon Go, Treasure Truck, India, Sustainability, Empowering Small Business, Investment & Job Creation, and Career Choice. Interested readers can look them up themselves. Much of it concerns increases in scale and geographic expansion, so I am taking a shortcut. Please forgive me.) /The Road Ahead/ This year marks the twentieth anniversary of our shareholder letters. Our core values and approach have not changed. We will continue working to be the world’s most customer-focused company. We acknowledge that this is no small challenge. We know there is much more we can do, and we are tremendously enthusiastic about the challenges and opportunities ahead. Thanks to customers, shareholders, and employees. As usual, the letter is attached. Day 1. Jeffrey P. Bezos (Chinese translation by Vinchent) ——Verification note—— Source: Amazon’s 2017 shareholder letter, an official public document. The Chinese translation was reposted from Dedao App user Vinchent, as credited in the original post. Verification: Compared with the official original in Amazon’s official shareholder-letter collection, cross-checked against SEC documents/official PDFs. Selected major figures and facts were consistent; the entire text was not compared word for word.